Derek Kohalmi on behalf of Pharus Wealth Advisory Group

October 08, 2026

A couple going through their retirement plan and finances.

Retirement Readiness Beyond Your Portfolio: RRIF Timing, Minimum Withdrawals and Income Splitting in Canada

Every October 1, Canada recognizes National Seniors Day, a fitting time to ask a more practical question: what does it really mean to be ready for retirement?

Retirement may last decades, yet planning is still usually reduced to one question: "Do I have enough?"

It is an important question, but not the only one. A strong portfolio can fund retirement. It cannot decide when to start CPP, which account to draw from first, what your tax bill will look like at 75, whether your estate documents still reflect your wishes, or what happens if your health or housing needs change.

In our work with pre-retirees and retirees, confidence comes less from the size of the balance than from knowing how the pieces fit together.

The portfolio funds the plan. It is not the plan.

Key takeaways

Readiness means coordinating income, government benefits, taxes, health, housing, legal documents and lifestyle.
Your RRSP must mature by December 31 of the year you turn 71, but waiting until then can create a tax problem you could have avoided.
No RRIF minimum is due in the year you open the plan. It starts the following calendar year.
The minimum is a floor, not a ceiling, and it is taxable even when no tax is withheld.
From age 65, RRIF income can generally be split with a spouse. For incorporated professionals without a workplace pension, RRIF income can become an important source of eligible pension income for splitting from age 65.
The younger-spouse election only lowers the floor. It must be made on the original application and cannot be changed later.

This article moves in four steps: what readiness means, when to convert, how RRIF minimums and spousal choices work, and what to do at each stage.

What does retirement readiness mean beyond your investments?

Build a floor, then fund the rest. Think of retirement income in two layers. The first is essential spending: housing, food, taxes, insurance, health costs. The second is everything else: travel, gifts, projects. The more of the first layer that is covered by income you cannot outlive, such as CPP, OAS, a workplace pension or, in some cases, an annuity, the less pressure the portfolio is under in a bad market and the more freely the second layer can be spent. Most households have never sorted their spending this way. It is one of the most clarifying exercises we do.

CPP and OAS timing. CPP can begin as early as 60 at a permanently reduced amount. Each month of deferral after 65 adds 0.7%, up to 42% at 70. OAS begins at 65, and each month of deferral adds 0.6%, up to 36% at 70. Deferral is a form of longevity insurance, bought with your own savings during the bridge years. Whether it makes sense depends on health, other income, a spouse's situation and exposure to the OAS recovery tax. It is rarely a coin flip, and it is worth modelling.

A withdrawal strategy. Most retirees hold several pools: RRSPs or RRIFs, TFSAs, non-registered portfolios, workplace pensions and, for incorporated professionals, investments inside a corporation. Each is taxed differently. We explored how these different tax buckets interact in Tax Season Perspectives: How Affluent Families Think About RRSPs, TFSAs and Corporate Investing. The retirement question is not only how much to withdraw, but from where, at what age, in what order and at what tax rate.

Health, housing and legal readiness. Does employer health and dental coverage end when you retire? How would you fund home support or care if your health changed? Is your home part of the retirement funding plan, or an asset you intend to leave behind? A current will, powers of attorney, up-to-date beneficiary designations and, where appropriate, a spouse named as successor annuitant on your RRIF all matter. We explored how these pieces fit together in Estate Planning Foundations: Wills, Powers of Attorney and Beneficiary Designations. We also encourage clients to name a trusted contact person and make sure someone knows where key documents are.

What you are retiring to. Work provides structure, relationships and identity. Travel, grandchildren, volunteering, consulting and community shape both what retirement costs and what you want it to be.

When do you have to convert an RRSP to a RRIF?

An RRSP must mature by December 31 of the year you turn 71. At that point you can generally transfer it to a RRIF, buy an eligible annuity, withdraw the funds and include the taxable amount in income, or combine those options. Most people choose a RRIF because the investments can stay in a tax-deferred registered account while withdrawals begin.

But there is an important distinction.

Age 71 is a deadline, not a strategy.

We explored the accumulation side of this decision in RRSP Season, Reframed: What Families Often Miss When Thinking About Retirement Savings, including why RRSP decisions should be considered in the context of future taxable income—not simply the tax deduction available today.

Here is why. Consider Daniel, a physician who retires at 63 with $1.2 million in his RRSP and no workplace pension.

How to read this example: it is a simplified illustration, not a projection or a recommendation. It assumes a 5% annual return; that Daniel starts CPP and OAS at 70 and receives $35,000 a year combined; that he is single, so there is no spouse to split with; and that he has enough tax-free savings to fund seven years of spending in Path A. Brackets, CPP, OAS and the OAS recovery threshold ($95,323) are held at 2026 levels with no indexing. Tax is approximated from 2026 combined federal and Ontario marginal rates. It does not include all tax credits (for example the age amount and pension income amount), the Ontario Health Premium or other tax-return factors, and actual results will differ. For tax advice, please consult a tax professional.

In Path A, Daniel waits until 71. He funds his spending from tax-free savings, so he has no taxable income from 63 to 69, and seven years of low brackets go unused. In Path B, he draws $60,000 a year from the RRSP from 63 to 69, paying about $9,300 a year in tax (an average of about 15.5%) while his tax-free savings stay invested.

	Path A: wait until 71	Path B: $60,000 a year from 63 to 69
Tax paid in bridge years (63 to 69)	None	About $65,100
RRIF on January 1 of age 72	About $1.86 million	About $1.30 million
First minimum (5.40%)	About $100,500	About $70,000
Income at 72, with CPP and OAS	About $135,500	About $105,000
Income tax plus OAS recovery at 72	About $41,100	About $24,300
Income at 80	About $150,000	About $115,000
Tax plus OAS recovery, 72 to 80	About $407,000	About $240,000
Including bridge-year tax	About $407,000	About $305,000

At 72, each additional RRIF dollar in Path A is taxed at roughly 58%: a 43.41% combined marginal rate plus the 15% OAS recovery. Over ages 72 to 80, Path B comes out roughly $100,000 ahead in this simplified model.

This is not a recommendation to draw $60,000. The right amount depends on your brackets, other assets, a spouse's income and your estate goals, and in practice we would size bridge withdrawals so after-tax spending is the same in both paths. A spouse and income splitting would also change the numbers. But the pattern is real. The RRSP did not become a problem because of its investments. It became one because mandatory withdrawals arrived all at once, at high brackets, alongside CPP and OAS.

Age 65 is the other key milestone. RRIF income received by someone who is 65 or older at year-end generally qualifies as eligible pension income. That makes it available for pension income splitting and for the federal pension income amount, a credit on up to $2,000 of eligible pension income. For a couple without a workplace pension, a partial RRIF at 65 can create that income.

Conversely, someone still earning substantial professional income may have little reason to accelerate taxable withdrawals. So the right question is not "At what age should everyone convert?" It is "When should registered income begin within this household's broader retirement and tax strategy?"

What does a RRIF minimum withdrawal actually mean?

The minimum is the RRIF's value at the beginning of the year multiplied by a prescribed factor based on age. Under 71, the factor is 1 ÷ (90 − age). From 71, prescribed percentages apply. For most RRIFs (those set up after 1992; different rules apply to certain earlier plans), common factors are:

Age at start of year	Minimum
65	4.00%
70	5.00%
71	5.28%
72	5.40%
75	5.82%
80	6.82%
85	8.51%
90	11.92%
95 and older	20.00%

For every age from 65 to 95, see CIBC Wood Gundy's RRIF minimum withdrawal chart. A 72-year-old with $500,000 in a RRIF at the start of the year must withdraw at least $27,000.

The RRIF minimum is a tax rule, not a spending recommendation. A few things follow from that:

·It is a floor. There is no maximum RRIF withdrawal.

·It is taxable. Tax is generally not required to be withheld from the minimum itself, but that does not make it tax-free. Amounts above the minimum are subject to withholding. Outside Quebec, that is 10% on amounts up to $5,000, 20% from $5,001 to $15,000 and 30% above $15,000, and the rate can depend on how extra withdrawals are structured. Withholding is a prepayment, not your final tax.

·You need not spend it, and you may not need to sell to take it. The money must leave the RRIF, but it can go to a TFSA if you have room, or to a non-registered account. Depending on the institution and the investment, you may be able to take the minimum in kind. The securities are taxed at their fair market value on the day they leave, and that value generally becomes your new cost base. Payments can be monthly, quarterly or annual, and clients who do not need the income sometimes take the minimum late in the year to extend deferral.

Should you base your RRIF minimum on a younger spouse's age?

When you open a RRIF, you can elect to calculate the minimum using your spouse's or common-law partner's age instead of your own. If they are younger, the required minimum is lower.

Consider a 75-year-old with an $800,000 RRIF. At 5.82%, the minimum is $46,560. If their spouse is 68, the factor is 4.55% and the minimum falls to roughly $36,400, about $10,000 less forced taxable income that year.

The catch is timing. The election must be made on the original RRIF application, before the first payment, and it cannot be changed for that RRIF, even if the spouse later dies or the relationship ends. A transfer to a new RRIF can allow a new election, but that takes deliberate planning. The election affects only the minimum. It does not change who owns the RRIF or whether the income qualifies for splitting.

Here is the point many people miss. The election only lowers the floor, never the ceiling. Using the younger spouse's age often preserves flexibility because it lowers the required minimum without limiting the amount you may voluntarily withdraw. If you plan to draw well above the minimum anyway, it changes nothing. If you do not need the income, it keeps taxable income from being forced out sooner than necessary. The real decision is not the election. It is how much you choose to withdraw, and when.

Tax deferral is not tax elimination.

On death, the RRIF is generally included in income unless a qualifying rollover or other exception applies. A spouse or common-law partner may be able to continue or transfer the RRIF on a tax-deferred basis, including through a successor-annuitant arrangement. Where there is no such rollover, a large RRIF can be costly: in Ontario, 2026 income above about $258,000 is taxed at a combined 53.53%, and a large RRIF added to a final-year return can reach that range quickly. For a family with a large RRIF, drawing some of it earlier, at lower brackets, may produce a better lifetime and estate outcome than maximum deferral. Daniel's example is the same principle at work.

How does RRIF pension income splitting work?

If the person receiving eligible RRIF income is 65 or older at year-end, up to 50% can generally be allocated to a spouse or common-law partner for tax purposes. The receiving spouse can be any age. The couple elects jointly each year on Form T1032, no account or cash moves, and the percentage is decided when you file, with the year's actual numbers in front of you.

For incorporated professionals, this matters more than it first appears. Dividends from your corporation are not eligible pension income, so if you have no workplace pension, RRIF income can become an important source of eligible pension income for splitting from age 65. (Dividend splitting is governed by separate rules, which we cover elsewhere.)

The obvious benefit is bracket management. The less obvious one is managing clawbacks. For the 2026 income year, the OAS recovery tax begins when an individual's net income exceeds $95,323, at 15 cents on each dollar above. The threshold is indexed, so review it each year. It applies to each person's own income, not household income, so splitting can sometimes bring one spouse under it without pushing the other over. The age amount credit also phases out at a much lower income than OAS, so the benefit can reach further than the headline threshold suggests.

A simplified illustration (2026 figures, not a client example): Margaret, 75, has a $1,000,000 RRIF, so her minimum is $58,200. Her CPP, OAS and workplace pension add $52,000, bringing her income to about $110,200. That is $14,877 over the threshold, or roughly $2,230 of OAS recovery tax. Her husband Robert, 72, has income of $38,000. If Margaret allocates $29,100 (half of her RRIF income) to Robert, her income falls to about $81,100 and his rises to about $67,100. Both are below the threshold, so the household could potentially eliminate the recovery tax while making better use of both tax brackets.

This example is for illustration only. It does not include all tax credits or other tax-return factors, and splitting 50% is not always optimal. The best amount can change every year.

CPP and OAS are not eligible for this election. CPP has its own sharing arrangement through Service Canada, and OAS cannot be shared.

What should you do at each stage?

60 to 64: Separate essential from discretionary spending. Model CPP and OAS start dates. Test whether bridge-year withdrawals make sense. Update your legal documents, and plan how employer health coverage will be replaced.

At 65: OAS can start. RRIF income becomes eligible for splitting and the pension income amount, so consider a partial RRIF if you have no workplace pension. Revisit whether CPP or OAS should begin or stay deferred.

65 to 70: Each year, decide how much registered income to draw, and file Form T1032 if you are splitting. Deferral stops adding to CPP and OAS at 70, so decide by then.

By December 31 of the year you turn 71: Mature the RRSP. If your spouse is younger, make the age election on the original RRIF application. If your spouse is 71 or younger at year-end and you still have deduction room, you can contribute to a spousal RRSP after your own has matured. If the spouse withdraws in the year of contribution or either of the following two calendar years, some or all of the withdrawal may be attributed back to the contributor.

From the year after the RRIF opens: Compare each year's minimum with the OAS threshold, decide on splitting, and decide whether to take more than the minimum.

Underneath every decision is a trade-off: current income, lower lifetime tax, flexibility, simplicity, estate value, giving. One strategy rarely maximizes all of them, so decide what you are optimizing for before you optimize. For incorporated professionals, there is another layer: coordinating personal registered savings with corporate investments and dividends. The order of withdrawals can have meaningful tax and estate implications. We explored this in our recent article on retirement planning for incorporated physicians.

Which RRIF misunderstandings come up most often?

"I have to cash out my RRSP at 71." No. A RRIF keeps the assets invested and tax-deferred.

"My first minimum is due when I convert." No. It starts the following calendar year.

"The minimum is the most I can take." It is the least you must take.

"No tax was withheld, so it isn't taxable." Withholding and tax owing are different things.

"I have to spend what I withdraw." No. It can be reinvested, in cash or, where available, in kind.

"I can pick my spouse's age later." Not for that RRIF.

"The goal is to minimize this year's tax." A lower bill today does not guarantee a lower lifetime bill. The real work is coordinating RRIF withdrawals, pensions, government benefits, TFSAs, non-registered assets and the estate across many years.

Frequently asked questions

Do I have to convert my RRSP to a RRIF at age 65?

No. Your RRSP must mature by December 31 of the year you turn 71. Some people establish a partial RRIF from 65 to create eligible pension income, and some draw from their RRSP earlier still to avoid large forced withdrawals later.

What is the RRIF minimum at age 72?

For most RRIFs, 5.40% of the plan's value at the start of the year. See CIBC Wood Gundy's full RRIF minimum chart.

Can I split RRIF income with my spouse before 65?

Generally not. RRIF income becomes eligible when the person receiving it is 65 or older at year-end, with exceptions for income received after a spouse's or common-law partner's death.

Can I use my spouse's age to lower my RRIF minimum?

Yes, if they are younger. The choice must be made on the original RRIF application and cannot be changed for that RRIF.

Is it always better to withdraw only the RRIF minimum?

No. The minimum is simply what tax rules require. Taking more can make sense when deliberately drawing registered assets at lower tax rates, funding lifestyle needs, making gifts or reducing the size of a future registered estate. The right amount depends on the broader plan.

The goal is not simply to retire. It is to be ready.

National Seniors Day is a chance to recognize what older Canadians continue to contribute to their families, workplaces and communities. It is also a reminder that a successful retirement involves far more than a portfolio number. The best plans turn accumulated wealth into income, flexibility and choices.

At Pharus Wealth Advisory Group, we help clients bring these decisions together: investment management, retirement income, tax-aware withdrawal planning and the broader questions that arise before and throughout retirement. If you are approaching retirement, or already retired and wondering whether the pieces fit together, this is a good time to review them with us.

The examples in this article are for illustration only and do not include all tax credits or personal circumstances. Tax rules and benefit amounts change. For tax advice, please consult a tax professional.

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